Billions to be slashed from Green Homes Grant budget

MPs suggested that around £320m of the fund would be made available moving forward

The Government has this week confirmed that the original £2bn funding for the Green Homes Grant was a “short-term stimulus”, with hundreds of millions of pounds set to be withdrawn from the fund.

The Green Homes Grants scheme was unveiled by Chancellor Rishi Sunak in the Summer Economic Update to Parliament, which outlined measures to boost job growth as part of an economic recovery from the coronavirus pandemic.

A total of £2bn was earmarked for the new Green Homes Grant for those who do not live in social housing. The grant covers two-thirds of the cost of verified energy-saving home improvements – rising to 100% for the poorest households.

Home improvements up to £10,000 were considered and the Government expected more than 600,000 UK homes to become more energy efficient as a result. It will also support more than 100,000 jobs in green construction.

However, it has been reported that just 5% of the fund has been spent. Some households have had to wait almost half a year for grants to be approved. The Guardian reports that as of 22 January, only £71m of the £1.5bn promised to householders had been given out – less than 5%.

The Government took the decision to extend the grants to run until March 2022, in part due to delays. However, responding to a parliamentary question, business minister Anne-Marie Trevelyan suggested that around £320m of the fund would be made available moving forward.

 “The original funding for the green homes grant voucher scheme was announced as a short-term stimulus, for use in the 2020-21 financial year only,” she said.

Earlier this month, Parliamentary Under-Secretary of State for BEIS Lord Callanan confirmed that around 20,000 vouchers had been issued under the scheme since it opened for applications last autumn. MPs warned that, if this pace of voucher issuance continues, the Government will take 10 years to meet its 600,000 homes targets.

The decision has been met by widespread criticism, with many green groups warning that it dampens confidence in the UK’s ability to meet the Prime Minister’s Ten Point Plan and the net-zero target for 2050. That the decision was in the same year that the UK will host COP26 only adds to the disappointment.

Ed Miliband said: “It is outrageous that the government is withdrawing funding promised to help insulate people’s homes. They are denying homeowners the energy improvements they need, denying installers the work they need and denying the country the green transition we need.”

The Heat Pump Association’s chair Phil Hurley said: “The Heat Pump Association is disappointed to see that unspent funding for the Green Homes Grant looks unlikely to be rolled over despite significant delays caused by the scheme’s administration rather than demand. This rollover would have demonstrated the Government’s commitment to improving UK homes through energy efficiency and low carbon heat and given the industry the time and confidence it needs to deliver the green recovery.”

Liquid Gas UK’s chief executive George Webb said: “The Government has fallen at the first hurdle of trying to tackle net-zero in the millions of homes around the UK. At its heart, the scheme misunderstood homeowners and people’s lives. The boxing-in of homeowners into a small set of options such as heat pumps did not tally with the realities of the way of life for millions and what they can afford. Forcing homeowners to select one primary and expensive improvement has prevented homeowners from carrying out realistic measures such as double glazing or draught-proofing.

“A one size fits all approach clearly doesn’t work, so UK Government must accept this when designing future schemes. There must be support for a mix of technologies, including options such as LPG and less intrusive energy efficiency measures, so that rural households and small businesses can all play their part in reducing their carbon footprint.”

Matt Mace